MEETING PURPOSE
Our investment team aim to meet every week to discuss the macro environment and how this could impact our current and future portfolio construction.
KEY TAKEAWAYS
- SA Property Upgraded: Nedbank research upgraded SA Listed Property to overweight, forecasting a 15% return. This aligns with our own 14% forecast, which we consider ‘conservative’. This recommendation is inline with our current SA Property exposure in funds and models. Good to get the confirmation.
- Brazil Emerges as EM Leader: Technicals show Brazil outperforming other BRICS nations against the EM index, suggesting a rotation of investor interest. Our Underlying EM exposure has Latin America exposure.
- Stablecoins as a New Treasury Buyer: A potential Trump administration policy requiring stablecoins to be backed by US Treasuries could create significant new demand for US debt and be US Dollar ‘positive’.
- Commodity Rotation Underway: The Coherent Capital portfolio is reducing its overweight in metals (~70% → ~50%) to increase exposure to energy and agriculture, reflecting a tactical rotation.
TOPICS
SA Market Outlook (Nedbank)
SA Property Upgrade: Nedbank upgraded SA Listed Property to overweight, forecasting a 15% forward looking 12 month return.
- MitonOptimal’s View: Our own 14% forward 12 month forecast is based on the same earnings growth but a more conservative 1% capital return assumption.
Equity Outlook:
- Valuation: The All-Share forward PE of 10.7x is in line with its long-run average.
- Performance Driver: 50% of recent returns came from actual earnings growth, not just multiple expansion.
- Risks: Increased competition for banks (fintech) and retailers (Temu, Shein, Amazon).
Gold Equities:
- Valuation: Attractive, with a 6-month forward P/CF of ~7.5x (vs. 5-10x historical range).
- Forecast: Nedbank’s forecast is based on a conservative $3,400 gold price, creating a disconnect with their bullish tactical view on Gold price potential.
Global Market Outlook (Alpine Macro & BlackRock)
Alpine Macro:
- Recommendation: Reduce equity risk (65% → 60%) and add a protective portfolio (10-yr Treasuries, VIX, USD/EUR, utilities).
- Rationale: Short-term market froth, but no full crash expected due to:
- End of Fed QT (not tightening).
- Young business capex cycle.
- Strong growth stock earnings.
BlackRock:
- AI Build-out: Massive capex (est. $5T–$7T over 5 years) faces physical constraints (compute, materials, energy).
- US-China: A 1-year trade truce provides a window for the US to secure rare earth supply from potentially Australia.
- Stablecoins: A potential Trump administration policy could require stablecoins to be backed by USD and US Treasuries, creating a new, significant indirect buyer for US debt.
Technical Analysis
SA Bonds & Rand:
- Bonds: The 10-year yield is poised for a major bullish break.
- Rand: Trading at the strong end of its R17.05–R17.50 range, consistent with the bullish bond view.
BRICS Equity Rotation:
- Brazil: Outperforming other BRICS nations against the EM index, suggesting a rotation of investor interest.
- China: Underperforming the EM index over the last 5 years.
Commodities:
- Precious Metals: Gold is consolidating above a bullish break; silver is testing a major resistance level at $52.
- Energy: Natural gas has recovered strongly; coal prices are at 10-year lows.
Investment Committee Workshop last week:
Outcome: A revised detailed framework was established for investment strategy formulation, portfolio and fund management, and manager evaluation.
Process: The team separated model portfolio processes from fund management processes and clarified responsibilities.
- 2026 Tuesday Meeting Format: A new three-part structure was agreed upon:
- Feedback on funds/models: Sessions including the sales team on rotational basis.
- Standard Investment Committee: Core strategy discussion.
- Investment Team Only: Private session for challenging convictions.
The content of this article is for information purposes only and does not constitute an offer or invitation to any person. The opinions expressed are subject to change and are not to be interpreted as investment advice. You should consult an adviser who will be able to provide appropriate advice that is based on your specific needs and circumstances. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable and given in good faith, but no representation is made as to their accuracy, completeness or correctness.3